Tuesday, August 01, 2006

There was an interesting interview in the WSJ with Peggy Yu, who with her husband runs the largest e-commerce site in China. After reading through the interview it is easy to see why she was able to raise $27MM of capital from principally US venture firms. No buzzwords--she has her own thoughts on running the business.

Some interesting excerpts are below:

WSJ: You are in the book-selling business. Is there any particular business book that you have found useful?Ms. Yu: "The Making of an American Capitalist" [Roger Lowenstein's biography of Warren Buffett] has had a lasting impression on me, and I go back to that book often. I've never met Warren Buffett in person, but from the book, he comes across as a person with vision and a lot of patience who does a lot of quiet thinking and deliberation. He sticks to several simple principles he believes in. At the same time, he is not stubborn.And one of his biggest principles, return on investment, affects a lot of my thinking. Whenever I spend money, I always think of value. If I spend this much here while I spend that much there, what's the value I derive from each area. He is extremely sensitive about these yardsticks.

WSJ: Is there one thing you wish that new hires at Dangdang already know when they come in?

Ms. Yu: Skills can be taught. Attitudes and habits are more important. I wish we could find a lot of people who are natural learners, who enjoy learning. I believe attitude decides your fate.

WSJ: Is there anything that you know now that you wish you had known when you were starting out?

Ms. Yu: Setting standards. I think benchmarking is extremely important. If there are no rules, everybody can work very hard, but in all sorts of directions. And then people get into argumentative moods. And people are using different yardsticks and aren't able to evaluate the situation very objectively.

WSJ: What is the most important piece of technology that you use?

Ms. Yu: My cellphone. On average, I send out 1,200 to 1,500 text messages to people every month. I also use it to check on prices in stores. I look around a store, I key in an ISBN number or some other number, send it to Dangdang, and instantly I know the Dangdang price versus the store price.

WSJ: What advice would you give to someone starting out now in your field?

Ms. Yu: Identify customer needs. Every single company sings the same song: "We are customer oriented." But most really don't pay that much attention to customers. To me, everybody is a customer. When I talk to you, you are a customer to me at this moment. I need to use language and examples that make my point clear to you. When I talk to my secretary, my secretary's my customer. I need to make things clear and easy for her to understand, and easy to give me feedback.

And I think for entrepreneurs, I have another philosophy that is very useful, which is, I always live well below my means. So money is never an issue for me or for the company.

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About Me

I have been at the intersection of IT, Finance and the Pacific Rim for the past 20 years in banking, venture capital, private equity and academia. My recent interests are in the application of technology, especially the internet, in emerging markets.